During 2023, the Biden Administration added $2.6 trillion to U.S. federal debt, while total federal tax revenue declined. Even more shocking, 77% of that $2.6 trillion was issued as Treasury “bills” of less than one year maturity. That is, it will have to be sold all over again in 2024, plus a similar amount of new debt! This is unusual to say the least, and looks only like the panic year 2020, when the volume of new debt was even larger, $4.0 trillion, the proportion of “bills” was 50%—but, interest rates were near zero.
The Treasury’s Janet Yellen and “independent” Fed’s Jerome Powell are coordinating hand-in-glove—just as then-Fed Chair Yellen and Treasury Secretary Steven Mnuchin did in 2020—and now, according to their planning, a series of interest rate cuts by the Fed in 2024 will prevent the government’s interest-rate annual burden from exploding way over $1 trillion. The Treasury will supposedly roll over all this short-term debt by issuance of medium-term “notes,” whose interest rates have fallen in 2023, partly because so few of them have been issued. Pending those 2024 Fed rate cuts, the very short-term rates on the “bills” are still over 4.5%, significantly higher than 10-year Treasury “notes.”
